Mortgages for foreigners or for Spaniards residing abroad have some differences compared to regular mortgages. For example, they allow financing up to 70% of the property, compared to 80% for regular loans, often have higher interest rates, and require a multitude of documents. However, this does not mean that these profiles cannot access bank financing to buy a house. Let’s review everything you need to know:

The Importance of Tax Residence

When buying a house and applying for a mortgage in Spain, it matters little whether you are Spanish or not. In fact, the most important thing to consider is where your tax residence is located. That is, the place where you pay the majority of your taxes.

If you have tax residence in Spain, it is quite easy to access a regular mortgage. Conversely, if you have your tax residence in another country (either because you are a foreigner or because you are a national expatriate who works and spends most of their life in another country), you will have a harder time accessing regular loans, so you will have to apply for «mortgages for foreigners» or «mortgages for non-residents».

These mortgages are offered by most Spanish banks and are designed for individuals whose tax residence is outside of Spain, although it is much easier under current legislation if the tax residence is within the eurozone.

Why Are Mortgages for Foreigners and Non-Residents Different?

Mainly because in case of default, banks have a harder time activating specific measures to recover the loan money. If the borrower’s tax residence is in another country, the bank has fewer means (or slower and more bureaucratic means) at its disposal to act against the borrower in case of default. Therefore, these types of mortgages are considered higher-risk products than regular mortgages and, consequently, present a series of differences that are worth knowing.

Differences Between Mortgages for Residents and Non-Residents

Each mortgage product for non-residents and each bank may have its own characteristics. However, in most cases, we find a series of common elements to this type of mortgages. These elements will affect both the amortization terms, the loan amount, and the interest rates paid.

How Much Money Can You Get with a Mortgage for Foreigners?

An important difference to consider is that, in the case of mortgages for foreigners, it is more common for the loan not to exceed 60-70% of the property value (in the case of regular mortgages, this amount usually rises to approximately 80%).

This means that, in order to buy a home in Spain accessing financing through one of these mortgages, we must have saved approximately 40-50% of the total price of the house in question (30-40% of the price that the bank does not finance us and an additional 10% for the payment of the expenses associated with the purchase-sale transaction).

How Much Interest Do You Pay on a Mortgage for Non-Residents?

As mortgages for non-residents are understood to be for second homes, the interest rates paid for these mortgages are higher than in the case of conventional mortgages. That’s why, finding a mortgage with hiptk! Is the best way to optimize the payment of the interest.

Documentation for Applying for a Mortgage for Foreigners

One of the aspects that generates the most interest when applying for a mortgage for foreigners or non-residents is the documentation we will need for the process. The bank will ask us for the following documents:

• Copy of the NIE or passport.
• Certificate stating that you are not a resident.
• Copy of the employment contract.
• Copies of the latest payslips from your country of residence.
• Bank statement for the last year from the account where the salary is deposited.
• Tax residence certificate.
• Tax declaration.
• The last three receipts for paying outstanding debts.
• The purchase contract for the property to be purchased (or the earnest money contract if the purchase-sale contract is not yet available).
• In many cases, they will ask us to translate the documentation, depending on the entity and the language in which the documentation comes.

How to Apply for a Mortgage as a Foreigner but Resident in Spain?

As we mentioned a few lines above, the difference in applying for a regular mortgage or a mortgage for foreigners in Spain depends directly on where the tax residence is located, and not so much on the nationality of the applicant.

Therefore, if you are a foreigner but have tax residence in Spain, the way to access a mortgage is the same as for any national resident. That is, by applying for a regular mortgage at the bank of your choice. In any case, and just like when looking for a traditional loan, it is important to compare mortgages to find the product that best suits our needs and preferences as a client.

Want to Buy a House in Spain but Live Abroad?

Do you live abroad but are thinking of buying a house in Spain? In this case, a good option is to contact a service for non-resident brokers, such as the one offered by hiptk!, where you will find information on everything you need to do to apply for a mortgage and buy a property in Spain. We analyze your case individually and offer you the solution that best suits your needs and preferences.